In the video below you can see how to jailbreak your iPhone easy with PwnageTool 3.1.4 on firmware 3.1.2

Prepare – The stuff you need

1. PwnageTool 3.1.4

2. Firmware 3.1.2 or the for your iPhone 1gen (1,1) iPhone 3G (1,2) iPhone 3GS (2,1)

get them from here

3. Follow the instructions on the video

* when you click restore for in iTunes you need to hold option/alt!